New legislation was introduced in the Senate Tuesday that would unwind some of the largest Medicaid funding hits hospitals are set to weather under the One Big Beautiful Bill Act.
Sen. Josh Hawley, R-Mo., was a vocal opponent of the funding bill’s reductions on provider taxes and state directed payments during negotiations but ultimately voted alongside his party to pass the package.
The rural senator, at the time, touted a $50 billion bridge fund for hospitals Republican leadership included in the bill to settle Hawley and other holdouts like Sen. Lisa Murkowski, R-Alaska, as key to his endorsement. Still, Hawley vowed that he would “continue to do everything in my power to reverse future cuts to Medicaid” that begin in 2028 under the legislation.
Hawley’s new bill, titled the Protect Medicaid and Rural Hospitals Act (PDF), would outright repeal the sections of the reconciliation bill related to Medicaid state provider tax authorities and Medicaid state directed payments. Additionally, it would double the $50 billion Rural Health Transformation Program to $100 billion by extending its $10 billion-per-year payouts by another five years.
“President Trump has always said we have to protect Medicaid for working people,” Hawley said in a release announcing the legislation. “Now is the time to prevent any future cuts to Medicaid from going into effect. … I want to see Medicaid reductions stopped and rural hospitals fully funded permanently.”
The "big, beautiful bill" signed into law July 4 was widely panned by the hospital industry, which pointed to the provider tax moratorium and reduction as well as other provisions that would increase the country’s number of uninsured individuals and thereby increase hospitals’ uncompensated care burden.
A KFF analysis of the package estimated a $155 billion decrease in federal Medicaid spending among rural areas over 10 years. Hawley’s home state of Missouri is in line for a $5.4 billion reduction, according to the same analysis.
Hawley’s push is likely to face opposition from some within his own party, who had pushed for deeper cuts to be included in the landmark funding bill. Capitol Hill is currently turning its attention to a rescission package that would green-light the White House’s request for $9 billion in spending cuts, which, as of a Tuesday vote, no longer include axing $400 million from the president’s Emergency Plan for AIDS Relief.